The Agency That Could Derail Republicans' Obamacare Repeal

Emily Cadei

Updated | The prospects for House Republicans’ proposal to repeal and replace Obamacare, unveiled Monday night, may well hinge on one small federal agency. The biggest unanswered questions that dog the new bills drafted by two House committees—and Republicans’ repeal effort, more generally—are how much their plan will cost and how many people will lose insurance. And it’s up to the Congressional Budget Office (CBO), a nonpartisan agency that analyzes the impact of proposed legislation for Congress, to estimate what those figures are likely to be.  

Related: House GOP unveils legislation to repeal Obamacare and expand Medicaid 

As Avik Roy,  a conservative health care expert who advised Mitt Romney’s 2012 presidential campaign, framed it for Forbes Tuesday, “The $2 trillion question is: Does the AHCA explode the deficit, or is it relying on steep Medicaid cuts to keep the deficit in line? We won’t know until the CBO scores the bill.” Roy used the acronym for the American Health Care Act, as House Republicans' proposal is known.

It will be days if not weeks for the CBO to produce that “score”—the budgetary impact of the House legislation—as well as to calculate how many people the new plan is likely to cover.  The bills, which President Donald Trump endorsed on Tuesday, would radically remake the current health care system, repealing most of the taxes and mandates that helped pay for the expansion of coverage under the 2010 law known as Obamacare; replacing the subsidies for purchasing private insurance with tax credits that will benefit the rich more than the poor; and phasing out the expansion of Medicaid that occurred under Obamacare. GOP leaders in the House, however, aren’t waiting for the CBO: The Ways and Means and Energy and Commerce Committees will hold votes on their sections of the repeal-and-replace legislation Wednesday morning.

The decision to rush the bills forward is drawing fire from various corners of Washington. Not surprisingly, Democrats have condemned the move, with House Minority Leader Nancy Pelosi sending a letter to Republican Speaker Paul Ryan on Tuesday arguing: “The American people and Members have a right to know the full impact of this legislation before any vote in Committee or by the whole House.” Among the questions she said the CBO and Congress’s nonpartisan Joint Committee on Taxation need to answer:

  • “How many fewer Americans will have health insurance coverage compared to current law in Medicaid and the Marketplace?”

  • “What happens to the premiums, deductibles, out-of-pocket costs, and average value of insurance plans for those with coverage in the Marketplace?”

  • “How will the bill impact the federal deficit?”

Democrats aren’t alone in attacking House leaders for moving forward before the completion of those kinds of impact assessments. Congressional expert Norm Ornstein of the American Enterprise Institute, a center-right think tank, tells Newsweek the urgency to vote on the bill “is made up.” And he notes that for all the criticism Republicans heaped on the way Obamacare was jammed through Congress in 2010, “the architects of that bill kept going back to make changes that fit the CBO scores” and make sure “that this was fiscally sound, trying to make sure that the promises made would largely be kept.”

“That’s the way you’re supposed to be making policy,” Ornstein says. “This is not.”

Roy, meanwhile, wrote in Forbes that “proceeding without a [CBO] score…means that members of the House Energy and Commerce and Ways and Means Committees will not have the information they need to make informed decisions about how best to revise the bill.” Roy predicted the CBO will assess that Republicans’ replacement plan will cover “around 20 million fewer Americans than Obamacare.”

In January, the CBO issued a preliminary assessment of how many people would lose coverage if Obamacare were repealed in its entirety, estimating the number of uninsured Americans would grow by 18 million just in the first year. Republicans countered at the time that that estimate did not take into account their replacement plans. Roy wrote that it’s possible to quibble with the CBO’s economic models, but “there can be little doubt that the [GOP] plan will price millions out of the health insurance market.”

37_Paul Ryan

House Speaker Paul Ryan during a news conference on Capitol Hill in Washington, March 2. Ryan and other Republican leaders introduced legislation March 6 to repeal Obamacare, but it already faces headwinds. Yuri Gripas/REUTERS

Republican leaders are ducking questions about who might lose insurance under their new plan. Speaking at a press conference Tuesday at the Capitol, House Ways and Means Committee Chairman Kevin Brady insisted the better question is whether the proposal will give more Americans access to affordable care. “Here’s what I know in Texas, in our district, more people have...found a way to get out of Obamacare than are taking it. And those who have it frankly can’t use it, the deductibles are too high, the copayments are too high,” he argued. “We’re actually giving Americans a broad choice of plans they can actually use.”

Brady’s GOP colleague, House Energy and Commerce Committee Chairman Greg Walden, meanwhile, declined to say whether the committees had worked with the CBO to get preliminary scores of the legislation as they wrote it. “We are waiting for CBO to give us a score,” was all Walden would say. Asked when that would be, he replied, “That’s up to the CBO.” But the Oregon Republican did take one pre-emptive dig at the agency, perhaps anticipating its assessment will not be positive. “It’s interesting, because if you go back to what CBO predicted would be covered on the exchanges today, they’re only off by about a 2-to-1 ratio,” Walden said sarcastically. “There were 21 million they projected would be covered, 10 million are actually covered.” It was just a hint at how politically contested the agency’s estimates will be.

No matter how much Republicans try to rebut the final assessment, however, the CBO’s figures are likely to be a potent weapon for critics. The agency has a longstanding reputation for independence and solid analysis that cannot be easily dismissed. Any estimates that show the House replacement plan will drive up federal spending, then, is sure to scare off fiscal conservatives, many of whom have already come out in opposition to the proposal. Members of the hardline conservative Freedom Caucus in the House and Republican Senators Rand Paul and Mike Lee have already condemned the bill as “Obamacare Lite” for using tax credits to help people pay for insurance coverage, which they deem a new kind of entitlement. On Tuesday afternoon, eight conservatives in the House and Senate held a press conference to criticize the House proposal and announce they are introducing their own alternative on Wednesday—a clean repeal bill.

On the flip side, moderate Republicans in the Senate are queasy about curbing Medicaid, the federal-state partnership that helps pay health costs for the poor, disabled and elderly. Under the House GOP plan, the federal government would go from providing unlimited matching funds to the states for Medicaid, to a flat per capita rate. In the process, the burden for making up any funding shortfalls would shift almost entirely to the states. And if the CBO comes back with a score that shows thousands of people in their states will no longer be able to afford insurance, that is likely to harden resistance, particularly among senators up for reelection in 2018.

Republicans can’t afford too many defections, given that no Democrats are expected to vote for this repeal plan. In the House, the GOP has a 44-seat advantage over Democrats, with five seats currently vacant. In the Senate, the party can only afford to lose three GOP votes. Given the rocky reception the House Obamacare repeal is already receiving, an unfavorable CBO report could well be the death knell for the bill as we know it.

This story has been updated to include details from conservatives' press conference on Tuesday afternoon.

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